There is consensus that Canadian families today face a more difficult financial reality than the Baby Boomers due to longer periods in school, the declining value of higher education, higher home prices, higher taxes and a changing and less secure job market.

However, there is an elephant in the Canadian family’s living room and it is family breakdown. While it would be foolish to claim family breakdown is the sole reason for financial difficulty, it is similarly foolish to say it plays no role whatsoever.

Where Baby Boomers finished school, got married and had children, current generations are not guided by this life script. “Polls and research show us that Gen-X and Gen-Y want the same things, they just don’t know how to get there,” says the report’s author Derek Miedema, researcher at the Institute of Marriage and Family Canada.

The new census data shows rates of cohabitation have risen by fourteen per cent in just the past five years. In Boomer days, living together wasn’t even measured as a cultural phenomenon, but since the 1980s, cohabitation rates have tripled. Cohabiting relationships are five times more likely to break up than marriage. At the same time, lone-parent families, which are more likely to live in poverty, have increased by eight per cent in the past five years.

In this light, new social entitlements, like publicly-subsidized daycare programs or new benefits for parents, will not address the problem, instead taking Canada down the road of increased taxes, increased debt and deficits, or both.

“If we fail to address family breakdown, no amount of financial transfers will alleviate the problems of familial – often leading to financial – instability,” says Miedema. “We simply can’t afford increased government spending. Public policy should allow Gen-X and Gen-Y to be more self-sufficient, relying neither on funds from parents nor on government largesse,” he concludes.

Recommendations in the report include:

Restoring the life script which says that children come after marriage

Schools should teach the social science research showing there is a difference in outcomes between marriage and cohabitation

The federal government should offer income splitting to all families with children to help ease financial burdens for families